Ardelyx stock tends to bounce higher after nearing its 80-day moving average
Ardelyx Inc (NASDAQ:ARDX) stock was last seen 0.6% lower at $7.75, extending a pullback from its Feb. 12, nearly seven-year high of $10.13. The shares are down 16.3% so far this month and underperforming a 3% March gain for the broader market SPDR S&P 500 ETF Trust (SPY). However, this deficit may present the perfect buying opportunity if history is any indicator.
ARDX just pulled back to a historically bullish trendline on the charts. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, Ardelyx stock is within one standard deviation of its 80-day moving average, a trendline that helped the stock move higher one month later in two out of three instances over the past three years. In both instances, the equity averaged a 13.5% 21-day return, meaning a move of similar magnitude would put it just below the $9 level.
An unwinding of options traders' pessimism could also bode well for the security. This is per ARDX's Schaeffer's put/call open interest ratio that stands higher than 97% of annual readings, implying a put-biased amongst short-term premium players.
It's also worth noting that short interest is up 19.4% over the last month, and the 33.61 million shares sold short account for 14.7% of Ardelyx's total available float. Those looking to speculate should consider options, as the equity's Schaeffer's Volatility Index (SVI) of 75% stands higher than just 9% of readings from the past 12 months -- a sign that options traders are pricing in lower-than-usual volatility expectations.